Amended proposal for a COUNCIL REGULATION (EEC) ESTABLISHING A COHESION FINANCIAL INSTRUMENT
Date: 1993-03-22
Institutions: European Commission
Subjects: Single European Act, environmental protection, intra-EU transport, transport infrastructure

QMMISSIOW  OF THE EUROPEAN  COMVIUNITIES 

COM(93)130 final 

Brussels,22  March 1993 

Amended  proposal  for a 

mtlNCIL  REGIHATION  (EEC) 

ESTABLISHING  A COHESION  FINANCIAL  INSTRUMENT 

(presented by the Commission  pursuant  to Article  149(3) 
of  the EEC-Treaty) 

- > *-

EXPLANATORY MEMORANDUM 

On 11 March 1993 Parliament gave its opinion on the Commission proposal in 
the document. 

This amended proposal takes account of the amendments proposed by 
Parliament which the Commission is able to accept. 

- 1 <^. 

AMENDMENT TO THE PROPOSAL FOR A 

COUNCIL REGULATION  (EEC) 

ESTABLISHING A COHESION FINANCIAL INSTRUMENT 

(COM(92) 599 final of 22 December 1992) 

In response to Parliament's opinion on the proposal for a Regulation 
establishing a cohesion financial instrument transmitted by the Commission 
to the Council and pursuant to Article 149(2J of the Treaty establishing 
the European Economic Community, the Commission has decided to amend that 
proposal as follows. 

- 2 -

1. 
Commission text: 

The following recital is inserted before the first recital in the 

"Whereas one of the Community's fundamental tasks is to encourage 
economic and social cohesion and solidarity between the Member 
States as essential goals so far as its development and success are 
concerned;". 

2. 
Commission text: 

The following recital is inserted after the second recital in the 

"Whereas on 10 June 1992 the European Parliament adopted a 
resolution on the Commission communication  'From the Single Act to 
Maastricht and beyond: the means to match our ambitions';1". 

3. 

A further recital is added to that recital: 

"whereas the European Councils of Lisbon on 26 and 27 June 1992 and 
Edinburgh on 11 and 12 December 1992 adopted conclusions concerning 
the establishment of the Cohesion Fund;". 

4. 

The third recital in the Commission text is replaced by: 

"Whereas the European Council, at its meeting in Edinburgh on 11 
and 12 December 1992, proposed creating an interim financial 
instrument pending the establishment of the Cohesion Fund and named 
the eligible States, the criteria and indicative allocation 
brackets in such a way as to ensure the immediate provision of 
financial aid to Ireland, Greece, Portugal and Spain in the areas 
to be covered by the Cohesion Fund;". 

O J M oC  176, 13.7.1992, p. 74. 

5. 

A further recital is added to that recital: 

- 3 -

"whereas the purpose of the financial instrument is to support the 
efforts required of the recipient States with a view to 
convergence;". 

6. 
1993" is deleted. 

In the fourth recital in the Commission text "before 31 December 

7. 
recitals: 

The following recital is inserted between the seventh and eighth 

"Whereas account must be taken of the major unavoidable development 
efforts required of certain Member States with a view to the 
necessary convergence of their respective economies;". 

8. 

The tenth recital is replaced by: 

"Whereas, in the light of an undertaking by the Member States 
concerned not to decrease their investment efforts in the fields of 
environmental protection and transport infrastructure and in the 
light of the budgetary demands which the convergence programmes 
place on the beneficiary countries, additionality  in the sense of 
Article 9 of Council Regulation  (EEC) No 4253/88 of 19 December 
1988 laying down provisions for implementing Regulation  (EEC) No 
2052/88 as regards coordination of the activities of the different 
Structural Funds between themselves and with the operations of the 
European Investment Bank and the other existing financial 
instruments will not apply to the cohesion financial instrument;". 

9. 

The following recital is added to the tenth recital: 

"whereas the Commission's Green Paper on the Impact of Transport on 
the Environment  (COM(92) 46) stressed the need to develop a 
transport network which better respected the environment;". 

10. 

The thirteenth recital is replaced by: 

- 4 -

"Whereas the operations of the cohesion financial instrument must 
be consistent with Community policies, inter alia those regarding 
environmental protection, transport, competition and the award of 
public contracts and whereas adequate information must be provided 
to ensure this;". 

11. 

The following recital is added to the fourteenth recital: 

"whereas an appropriate balance must be ensured between financing 
for environmental projects and for transport infrastructure 
projects;". 

12. 

The fifteenth recital is replaced by: 

"Whereas economic and social cohesion actions together with the 
objective of controlling public deficits will mean that a high rate 
of assistance is necessary;". 

13. 

The sixteenth recital is replaced by: 

"Whereas, in the interests of the proper management of the cohesion 
financial instrument, it is necessary to ensure effective methods 
of monitoring, assessing and carrying out checks in respect of 
Community operations ;". 

14. 

A new recital is added after the sixteenth recital: 

"Whereas adequate information should be provided, in particular 
through the annual report referred to in Article 10 of this 
Regulation and in Annex II hereto;". 

15. 

The second indent of Article 2 is replaced by: 

- 5 -

"- 

transport infrastructure projects of common interest financed 
by the Member States which promote the interconnection and 
interoperability of national networks and access to such 
networks, taking account in particular of the need to link 
insular, landlocked or peripheral regions with each other and 
with the central regions of the Community, in particular the 
projects which are provided for in trans-European network 
schemes which have been adopted by the Council or proposed by 
the Commission pursuant to Part Two, Title IV of the 
Treaty;". 

16. 

Article 3 is replaced by: 

"1.  The commitment appropriations considered necessary for the 
financial instrument shall be ECU 1 500 million in 1993 and ECU 
1 750 million in 1994, expressed in 1992 prices. 

The budgetary authority shall decide, as part of the budget 

2. 
procedure, what appropriations are to be made available for each 
financial year." 

17. 

Article 5(2) is replaced by: 

"2.  Preliminary studies and technical support measures necessary 
for the implementation of eligible projects may be financed at 100% 
of their total cost." 

18. 

The following paragraph 2a is added to Article 5: 

"2a.  The effective rate of assistance shall be established in 
accordance with the nature of the operations to be undertaken." 

19. 

Article 9 is replaced by: 

- 6 -

" 

Financial provisions, monitoring and assessment 

The Commission may, in agreement with the beneficiary Member 

1. 
State concerned, identify within a project stages regarded as 
technically and financially independent for the purposes of 
granting assistance from the financial instrument. 

Expenditure shall not be eligible for assistance under the 

2. 
financial instrument if it had been committed before the Commission 
received the relevant application.  However, in the case of 
applications submitted to the Commission before 1 September 1993, 
expenditure committed after 1 January 1993 may be taken into 
cons ideration. 

For the purpose of implementing this Regulation, the 
3. 
following provisions of Titles VI and VII of Regulation  (EEC) No 
4253/88 shall apply mutatis mutandis: Article 19(1), Article 20(1), 
Article 21(1) with the exception of the last sentence, Article 
21(5) and  (7), Articles 22, 23 and 24 and Article 25 with the 
exception of the last sentence of paragraph 4 and paragraph 7. 

The total amount of assistance granted by the instrument for 

4. 
each operation  (project, stage of a project, study or technical 
support measure) shall be committed when the Commission adopts the 
decision approving the operation. 

5. 
be paid according to the following procedure: 

Assistance granted to a project or stage of a project shall 

- 7 -

(a)  The advance made following each commitment may be up to 50% 

of the amount of assistance relating to expenditure in the 
first year as it appears in the financing plan approved by 
the Commission.  However, exceptionally for 1993, this 
advance may be up to two thirds of that amount for projects 
submitted before 1 September 1993. 

(b)  Intermediate payments may be made provided that the project 

is progressing satisfactorily towards completion and that two 
thirds of the expenditure relating to the previous payment 
and all expenditure relating to earlier payments have been 
made.  Intermediate payments may amount to up to 50% of 
assistance relating to expenditure planned for the year in 
question as shown in the financing plan approved by the 
Commission, adapted, if necessary to take account of the 
state of progress of the project. 

(c)  The balance of assistance shall be paid provided that: 

- 

the project or stage of the project has been carried 
out according to the objectives laid down; 

the beneficiary Member State or designated authority 
submits an application for payment to the Commission 
within six months of physical completion of the project 
or stage of the project, and 

the final report referred to in Article 25(4) of 
Regulation No 4253/88 has been submitted to the 
Commission. 

The balance may not be less than 20% of the total assistance 
granted. 

6. 
Payment shall be made to the authority or body designated by 
the Member State, as a general rule within two months of receipt of 
a valid application. 

- 8 -

Beneficiary Member States shall provide the Commission with a 

7. 
description of the management and control systems established to 
ensure the efficient implementation of projects. 

The Commission shall examine applications to verify in particular 
that the administrative and financial mechanisms are appropriate 
for effective implementation. 

The beneficiary Member States shall regularly inform the Commission 
of all cases of irregularities detected by an administrative 
authority or which have resulted in judicial proceedings.  The 
beneficiary Member States and the Commission shall take the 
necessary steps to ensure that the information exchanged between 
them remains confidential. 

In order to ensure the effectiveness of Community assistance, 

8. 
the Commission and the beneficiary Member States concerned, in 
cooperation where appropriate with the EIB, shall undertake a 
systematic assessment of projects. 

On receipt of an application for assistance and before the projects 
are approved, the Commission shall thoroughly examine the 
application to establish that it meets the criteria in Article 8(5) 
of this Regulation and to determine the impact expected in terms of 
the objectives of the financial instrument, quantified using 
appropriate indicators.  The beneficiary Member States concerned 
shall provide all necessary information, including the results of 
feasibility studies and ex-ante assessments, to make this 
assessment as effective as possible. 

- 9 -

During the implementation of projects and after their completion, 
the Commission and the beneficiary Member States shall assess the 
way in which the projects are or were implemented and the potent i::-. I 
and actual impact of their implementation in order to assess 
whether the original objectives may be or have been achieved. 

9. 
specified in the decisions approving the projects." 

The details of this monitoring and assessment shall be 

20. 

Article 10(1) is replaced by: 

"1.  The Commission shall present an annual report on the 
activities of the financial instrument to the Council, the European 
Parliament and the Economic and Social Committee.  The report shall 
set out in an annex the list and content of the projects selected 
by Member State. 

The European Parliament shall deliver an opinion on the report as 
rapidly as possible.  The Commission shall give details of measures 
taken in response to the comments made in Parliament's opinion." 

21. 

Article 10(2) of the Commission text is replaced by: 

"2.  Member States shall ensure that adequate publicity is given 
to the operations of the financial instrument with a view to making 
the general public aware of the role played by the Community in 
relation to projects.  They shall consult the Commission on, and 
inform it about, the initiatives taken for this purpose.  In 
particular, Member States shall ensure the placement of clearly 
visible signs indicating the percentage of the cost of a particular 
project being financed by the Cohesion Fund." 

- 10 -

^•-.SR&^-^-'lïf 

22. 

Articles 11 and 12 of the Commission text are replaced by: 

" 

Entry into force 

v 

This Regulation shall enter into force on 1 April 1993. 

:s It shall remain in force until the entry into force of a regulation 
establishing a Cohesion Fund and in any case no later than 1 April 

X. 

If no fîvquiation establishing the Cohesion Fund has come into force 
by 1 ApriX1994, the Council, acting by a qualified majority on a 
proposal ftSm the Commission, shall decide on the extension of the 
financial inscynment for a limited period in order to ensure 
continuity between the financial instrument and the Cohesion Fund. 

This Regulation shall J^B binding in its entirety and directly 
applicable in all Member\Rtates. " 

Done at Brussels, 

\ 

For the Council 
The President 

ISSN 0254-1475 

COM (93) 130 final 

H  HwBm  ft^  9 «l 

• 

EN 

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Catalogue number : CB-CO-93-155-EN-C 

ISBN 92-77-54015-X 

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